Comoros - Politics, government, and taxation

The 3 islands that form the present state of Comoros were French
protectorates at the end of the 19th century and were proclaimed
colonies in 1912. Following a referendum in December 1974, the Comoran
Chamber of Deputies unilaterally declared the islands'
independence on 6 July 1975. Mayotte, the fourth island in the group,
opted to remain a French dependency.

Since 1975 there has been continuous political instability characterized
by coups and undemocratic regimes. Recent years have been marked by
internal political disruptions, and the islands of Anjouan and
Mohéli have attempted to secede.

The constitution of 1 October 1978 was amended in 1983, approved in a
referendum, and Comoros became a Federal Islamic Republic. Mayotte was
permitted the right to join when it so chose. A new constitution was
adopted on 20 October 1996. The constitution stipulates that each of the
islands has a council and a governor who is appointed by the president.
The president is elected by direct universal suffrage for an unlimited
number of 5-year terms.

The president appoints the prime minister, who heads the Council of
Ministers. There is a
bicameral
legislative branch, consisting of a 43-member Federal Assembly, the
members of which are directly elected for 5-year terms, and a 15-member
Senate, made up of 5 members from each island who are selected by
regional councils.

Colonel Azali Assoumani staged a bloodless coup on 30 April 1999. He
introduced a new constitutional charter giving himself full legislative
and executive powers. The Federal Assembly has not met since the coup.
Azali promised that he would serve for 1 year at the time he came to
power, but the elections promised for spring 2000 were not held.
Assoumani has pledged that elections will take place before the end of
2001, and it is expected that this will herald a reopening of the
Federal Assembly.

Comoros had a 1,500-man national army in 1997, the Force Comorienne de
Defense (FCD), which was supported by a French military contingent. The
size of the armed forces has not changed since the coup. The role of the
French has been to exert pressure for a return to democratic rule.

The main political forces are continually fragmenting and reforming, and
alliances are based mainly on opportunism. The party of government prior
to the 1999 coup was the National Union for Democracy in Comoros (NUDC).
Other parties are the Republican Party of Comoros (PRC), the Democratic
Front (DF), and the Movement for Socialism and Democracy (MSD). These
parties are now dormant. They are expected to come to life only when the
military government
sanctions
campaigning for the elections expected in late 2001.

Previously the island governors undertook tax collection, but it became
a federal responsibility under a 1983 constitutional revision. Wage and
salary earners were taxed at a maximum rate of 15 percent in 1987;
however, only government employees appear to pay tax, and there has been
no attempt at
income tax
reform in subsequent years. Tax rates have ranged from 17 percent on
consumer goods
to 60 percent on building materials and cars to 200 percent on luxury
goods. Import and export licenses are required but are usually limited
to a few favored firms. Tax revenue as a share of expenditure increased
from 33 percent in 1994 to 54 percent in 1998, implying an improved
ability to meet public sector expenses without relying on aid from
overseas. The total tax revenue share of the
gross domestic product
(GDP) also increased from 13 percent in 1994 to 15 percent in 1998.

The overall
budget deficit
in 1998 was estimated at US$8.4 million, equivalent to 4 percent of the
GDP. The nation's
external debt
at the end of 1997 totaled US$197.4 million, and the cost of
debt servicing
was about 10 percent of the value of exports in 1998, or slightly below
the 15 percent average for African nations. The relatively low
debt-servicing ratio means that Comoros has a greater availability of
foreign exchange with which to purchase imports.

Comoros is a member of several international organizations. These
include the Indian Ocean Commission (IOC), which is dedicated to
regional cooperation; the Common Market for Eastern and Southern Africa
(COMESA), which aims at reducing barriers to trade and the movements of
labor and capital; and the Franc Zone, which pegs the currency to the
French franc.